Central banks are expanding reserves for the first time in
a generation as prices head for an 11th straight annual gain and
assets in exchange-traded products rose to an all-time high.
Purchases may reach 450 tons this year, according to Marcus
Grubb, managing director of investment research at the London-based World Gold Council. Central banks and government
institutions bought 142 tons last year, IMF data show.

“Given gold’s much more attractive levels in October, we
would not be surprised if a similar trend of significantly more
buying than is reflected by IMF data actually occurred during
the month,” Edel Tully, an analyst at UBS AG in London, wrote
in a report today.

Gold touched a record $1,921.15 an ounce on Sept. 6 and
averaged $1,671.25 last month, valuing Russia’s purchase at
about $1.05 billion.

Germany’s gold reserves are at 3,396.3 tons, the IMF data
show. The country is the second-biggest holder after the U.S.,
according to the World Gold Council. A Bundesbank spokesman
confirmed the sale and said it was done to mint commemorative
coins, which is the only reason it sold bullion during the past
few years.